Microsoft Office Tutorials and References
In Depth Information
Financial Statements and Ratios
8. Click OK.
Excel inserts an array formula that uses the TABLE function with two arguments.
After you create the two-way data table, you can change the formula in the upper-left cell of the
data table. In this example, you can change the formula in cell B7 to
=PMT(B2*(B3/12),B4,–B1)*B4–B1
This causes the TABLE function to display total interest rather than payment amounts.
If you find that using data tables slows down the calculation of your workbook, choose
Formulas
Calculation
Calculation Options
Automatic Except for Data Tables. Then,
you can recalculate by pressing F9.
Financial Statements and Ratios
Many companies use Excel to evaluate their financial health and report financial results. Financial
statements and financial ratios are two types of analyses a company can use to accomplish those
goals. Excel is well-suited for financial statements because its grid interface allows for easy
adjustment of columns. Ratios are simple financial calculations — something Excel was designed for.
Basic financial statements
Financial statements summarize the financial transactions of a business. The two primary
financial statements are the balance sheet and the income statement:
h The balance sheet reports the state of a company at a particular moment in time. It
shows
Assets: What the company owns
Liabilities: What the company owes
Equity: What the company is worth
h The income statement summarizes the transactions of a company over a certain period of
time, such as a month, quarter, or year.
A typical income statement reports the sales, costs, and net income (or loss) of the company.
Converting trial balances
Most accounting software will produce financial statements for you. However, many of those
applications do not give you the flexibility and formatting options that you have in Excel. One

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